While other assets are currently overvalued, domain names aren’t.
Asset prices have been quite frothy for a long time. They were high a year ago and then they shot much higher over the past year.
Sure, sentiment might be positive. Asset prices might continue to go up. But when you look at historical valuation metrics of certain assets such as stocks, they are trading at very high prices even when you bake in tax breaks and a rosy outlook. Then there is a virtual currency created as a joke that is valued at a billion dollars.
Regardless of where you think asset prices are headed from here (and which assets will outperform), I feel very comfortable with where domain name prices are. The irrational betting that took place during the Chinese boom has more or less subsided, leaving us with investor prices that are below what end users are willing to pay. The domain market still has the important characteristic of having an investor market and an end user market, with the latter willing to pay more than how much it costs to invest in domains.
This isn’t to say that all domain bets will pay off. Even if you’re selling domains for more than you bought them for you need to consider your holding time and the domains you don’t sell.
But I believe that domain names have an underlying use and value, and I don’t think they are overvalued right now. There have been times I’ve scratched my head at domain valuations but that’s not the case at the beginning of 2018.
I’m bullish on domain names.
Michel Payette says
Great because I’m selling my portfolio of over 350 names, some dating back from 1999.
Price: $150,000. firm, if interested. 🙂
Michel
R P says
Agree with you. 10 yrs ago everyone was saying apps would render domains almost useless. 5 years ago almost everyone said new Gs would make .coms significantly less important.
Meanwhile, tech stocks on average are up about 5X’s since 2009. .Coms are more important in marketing than ever. Asia is now much more heavily invested.
Valuations of one of a kind, premium .coms are certainly not overvalued comparatively.
C.S. Watch says
Ten years ago the opening gambit for a quality coined or non-English brandable .com might hover around 25K. Now it’s around 50K. Five or six characters and easy to spell? Brace for six figures.
Unless your ambition is to become an invisible serf, your brand is everything. Nothing protects brand value (via data security, TM protection, authenticity, accessibility, etc.) with more efficiency than the intuitive .com. That’s why the market is so ruthless about it. (Why would you not have it? Are you stupid? And did you get your stupid all over your widget?)
Joe Wagner got 315 million for the Meiomi wine brand. Not a single vineyard acre changed hands. That’s mental real estate, for 315 million. Could Wagner have gotten to 315 million just waggling his past ad campaigns? What if he were MeiomiWines.com? Meiomi.biz? (Net bargaining effect of ‘being’ MEIOMI.COM: 50 million. Conservative estimate.)
KW BOSWELL says
Continual analysis, new individual journeys & other indices navigate in each portfolio owners path. Right? It seems that there is way more to come for the running of these domain name bulls starting now.
Andrew Rosener says
I predict 2018 is going to be the start of the greatest bull market in domains that the industry has ever seen. Much of this will be directly correated to the growth of the Crypto market as well as fractional ownership and new pricing / sales models as well as derivative products that allow for easier liquidity and borrowing against these assets.
BUT BUT BUT…I am only talking about the top 1-2% of domain names. The rest will lag or even be in a bear market for the foreseeable future.
Steve says
@Andrew(s)
I pray you both are right.
2017 was a decent year for me with domains, but no super sales.
But many persons did well in 2017 and commend them.
Don says
Me too. Go .horse domains ! Buy, buy, buy ! 🙂
Joking. Yeah, I think 2018 will most likely be good for .com.
Mark Thorpe says
Almost everyone said the sky was falling on the domain Industry in 2017, but not me.
I am bullish on .Com domains only in 2018 and beyond.
One-word, two-word, letter and number .Coms.
2017 was a domainers dream to buy some quality .Com domains at a discount, while a new crypto Industry has Increased demand for domains.
The domain Industry is coming into it’s golden age. It has gone global.
Domain prices are Increasing. More domain Investors than ever before.
End-users realize more than ever how important domains are to their business and are willing to pay for them. No longer are domain Investors considered squatters!
The pendulum has also swung to more online business than offline, which means more small businesses will need domains.
All this is good news for the domain Industry.
Mike Sallese says
I am with the Andrews and think this will be a very good year for Domains. Personally the Year has started with lots of activity thus far- much higher than last January.
Stocks/crypto have had a fantastic run in the past year that will hopefully continue but I feel Domains are poised for a good run after a relatively lackluster period.
Perhaps some folks that made great gains in stocks/crypto/investments will make additional investments in domains as well!
Cheers,
Mike
John says
Can.com for only $155k? Does it get any more ridiculous than that?
John says
That has to be a joke report, right?
Andrew Allemann says
So you’re saying that Can.com sold for a low price?
John says
LOL. Yes, indeed…
John says
And that’s if it’s not a joke report of course. With a price like that and where it’s been reported, I consider the jury still out on whether it’s just a joke.
Andrew Allemann says
Don’t know. I haven’t seen it. That said, part of the reason I’m bullish on domains is because the prices for some of the best domains have tempered quite a bit over the past couple years.
John says
Domain names are…
Extremely undervalued, and they have been for a long time now. And the domain investing community has been largely rolling over, drinking the Kool-Aid, and helping the “PTB” that want them to be undervalued (e.g., Google, et al) get them undervalued.
John says
I used to know the son of the big cheese behind a famous “can” corporation, many years ago when we were teens. He used to go around in $700 leather pants and we naturally thought that was pretty funny. Back then $700 was also a lot more than it is today, and that would still be a lot for pants now. $155k might just cover some pants and accessories for the guy now though.
John says
And speaking of drinking Kool-Aid and rolling over, Andrew, here you go:
https://domaingang.com/domain-news/sedo-sold-can-com-for-155000-dollars-in-brokered-deal/#comment-92145
Mark Thorpe says
Can.com definitely sold too low!
Rubens Kuhl says
Domains still face a relevance issue in a world of social media. I’m not saying domains won’t matter, but getting better valuations is going to be increasingly hard.
C.S. Watch says
This is a negotiation argument one hears sometimes, but only from first startups, never from corporate buyers. Buyers with marketing and legal teams know this is not only a flat point, it is a point in the seller’s favor.
An increase in dispersed loci of business goodwill increases the value of the one immutable locus. Also, the trend life expectancy of any social media site is getting shorter as our techcentric kids cycle in and our techsluggish grandparents cycle out. (Sorry, Nana.)
How much did one spend on advertising on Snapchat, Instagram, Twitter, Facebook, Myspace, Geocities, the Cave Lescaut…can you imagine an acquisition negotiation in which you’re bragging about a 1M ad outlay on Myspace without the intuitive .com? Maybe set yourself on fire instead.
‘Like me on Facebook.’ –Ozymandias
Gabriel says
I have BlockchaiNVESTS.com for sale at GDDY, and many more!
Eric Lyon says
Sadly, I think the majority of all the crypto/coin/BTC type domain registrations are going to leave a bunch of people holding the proverbial bag at a loss. Just my humble opinion though.
Mark Thorpe says
The crypto domain name cream will rise to the top.
Mark Thorpe says
Crypto domains are not like CHIP domains.
Crypto domains are here to stay.
Taylor says
Crypto / Blockchain is not a fad, it is life changing technology, fiat money is useless
elevator says
The crypto domains that would sell better this 2018 will be those that are much service oriented types.
Yee! The year looks to be more better for domainers as a matter of facts, having looks at what is presently reported at dnjournal.
Cheers
John says
This would appear to be strongly recommended reading for everyone, Andrew:
“Twenty-Five Years Later: What Happened to Progressive Tech Policy?
A glimpse at how the Internet has changed over time”
https://washingtonspectator.org/rotenberg-tech-policy/